Sentiment Indicators

200-DMA Indicator : This indicator measures the percentage of Nifty 50 stocks that are trading above/below their 200-day simple moving averages. The 200-DMA is considered important as it is one of the basic technical indicators that can be used to determine the longterm trend of a security. Almost 30 per cent of the stocks that constitute Nifty 50-the equity benchmark index, are trading above their 200-DMAs while, 70 per cent of the stocks are trading below their 200-DMAs. On a WoW comparison basis, we observed that 2 per cent of the stocks have managed to close below their 200-DMAs.

In the last five trading sessions, Adani Ports, Asian Paints and Bharti Infratel has managed to close below its 200-DMA, while on the flip side, Infosys and Tata Consultancy Services have managed to close above its 200- DMA. Since the last five trading sessions, the fight between the bulls and bears continues and due to this, the index has been trading in the range of 10,447-10,194. This is clearly visible in this indicator as no significant development has been witnessed since the last five trading sessions. Going ahead, the penetration with strength on either side would open gates for a trending move.

Sectoral Sentiment Indicator : This indicator basically interprets the number of stocks in the sectoral indices, trading above/below their 200-day moving averages. This will help us to know which sectors are improving their performance. The week had been a lacklustre one and not much action has been seen and this is clearly visible in the sectoral sentiment indicators as only one index has seen a substantial change in the ratio of stocks trading above/below their 200- DMA. On a WoW comparison basis, the sectoral index-Nifty IT has seen a substantial improvement as almost 30 per cent stocks have managed to close above their 200-DMAs, followed by Nifty PSU Bank by 7.69 per cent. Among the constituents of Nifty FMCG and Nifty Metal, about 6.67 per cent each stocks have moved above their 200-DMA. On the flip side, among the constituents of Nifty Financial Services, almost 5 per cent stocks have managed to close below their 200-DMAs. Nifty Auto, Nifty Bank, Nifty Media, Nifty Pharma, Nifty Private Bank and Nifty Realty remain unchanged on a WoW comparison.

Among the constituents of Nifty Pharma index, almost 90 per cent of the stocks were trading above their 200-DMA since the last nine weeks and in the last week, the stocks were trading above its 200-DMA by an average of 25.05 per cent but in the current week, we have seen a correction in the stocks by an average of 3.09 per cent. Nifty PSU Bank is consistently witnessing new addition in stocks, which are trading above their 200-DMAs since the last two weeks. In Nifty PSU Bank Index, on a cumulative basis, almost 23 per cent constituents have managed to close above their 200-DMAs in the last two weeks. 

Indicator To Gauge Internal Strength : This indicator helps us to gauge the internal strength of the market. Among Nifty 500 stocks, a higher number of stocks reaching 52-week highs and the lesser number of stocks hitting 52-week lows represent a bull market while, the opposite suggests a bear market. On a WoW comparison, the previous week's average ratio was 13:0 and in the current week, the average ratio is 6:1 where, on an average, six stocks touched new 52-week high while on the flip side, one stock hit new 52-week low. In the month of June, Nifty 500 index has gained almost 652 points or 8.34 per cent and this is clearly visible in this indicator as on month-on-month basis, we have not only seen that there is a significant addition in the stock making new 52-week high but also, a notable decline in the stock making new 52-week low.

On a MoM comparison, May month's average ratio of stocks making new 52-week high/low was 3:14 and in the month of July, the average ratio was 9:1, where, on an average, nine stocks touched new 52-week highs while, only one stock hit new 52-week lows. With this, the monthly ratio of stocks making new 52-week high/low in the month of July stood at 9:1, which is the most improved ratio since January 2020. However, in the last five trading sessions, Nifty 500 traded in the range of 185 points. It is broadly moving in the range of 8,595.45-8,410.15 level. Going ahead, as long as the index is trading in a small range, keep focus on the stock specific action. 

(Closing price as of July 01, 2020)